| Business: SOLOMONS GOLD SEEKS MORE FUND |
Plans change in light of new data
Dionisia Tabureguci
Gold production at the Solomon Islands’ Gold Ridge mine is not likely to start until late next year.
Its owner, Australian Solomons Gold (ASG), is seeking to raise more funds to finance the refurbishment of its processing plant and more mineral exploration work at the promising Charivunga Gorge area.
 |
Gold production delayed... Gold Ridge processing plant with pit at the background.
|
The Toronto-listed company announced last month its intention to raise C$15 million (A$16 million) through a subscription receipt issue, a marked deviation from earlier plans announced in May to raise C$115 million (A$124 million) via a brokered private placement of subscription receipts and hybrid notes.
This turnabout is also reflective of changes in ASG’s plans originating from “significant exploration results”, which the company said provides an opportunity to re-evaluate the scope of the current mine design and planning. As well, changes in market conditions have put the cost of the earlier bulk financing option out of context.
ASG chief executive John Bovard told ISLANDS BUSINESS the company’s earlier intention to raise C$115 million had been based on plans to complete work done on the processing plant at Gold Ridge, which would have then allowed for mining and gold production to begin.
However, the company has now decided to re-phase its plans, which will see work on the processing plant up and running by late next year.
“We needed around C$66 million (A$71 million) in order to complete work on the plant,” said Bovard.
“But in light of new exploration results, we have decided to break that down to stages. Basically, what we’re trying to do is to prolong the mine life. The previous people estimated it at seven to eight years. We would like to do more exploration work and build up our reserves—that is what we are doing now—and hopefully increase the mine life to at least 15 years.”
Gold Ridge mine, which operated an open-pit mining method, was a casualty during the Solomon Islands’ ethnic tension in 2000, when it had to close down after only 22 months of operation. Then owned by J V Mine (Australia) Pty Ltd, Gold Ridge went into receivership due to lack of business and was then sold to ASG.
With a sale agreement completed in 2005, ASG last year floated on the Toronto Stock Exchange and raised C$18 million, which it used to fund redevelopment work at the mine.
Packaged in the redevelopment of Gold Ridge was the refurbishment of the processing plant, a Bankable Feasibility Study, the relocation of nearby villagers and exploration work at the mine.
While these are still work-in-progress, a diamond-drilling programme it undertook last November, which further explored potential at four existing pits at the Charivunga Gorge area, returned what was described as “potential for Charivunga Gorge to host additional gold resources”.
A new drilling programme to test the mineralised zone was then started in June this year, which included two holes being drilled from the West side of the gorge.
“The latest drilling results are quite striking and when assessed in conjunction with the two holes in the gorge, together with earlier drilling in this area, suggest to us that we have identified a new significant mineralised zone.
“Our exploration programme has identified a number of other areas near the existing four designed pits with potential to significantly expand the overall resources.
“But these will now be deferred in favour of our focus on the new discovery zone,” said Bovard.
“Two of these pits will probably get bigger but there won’t be a new one.”
Aside from this new discovery and the potential it offers to build up ore reserves, ASG was also awaiting action from the Solomons government on the processing of documents regarding the new location for nearby villagers. We are ready to relocate the villagers as we have signed an agreement with them on this,” said Bovard.
“We are still waiting for the government to finalise the documents for the land.”
|
|
